Banks face new probe over mortgage bond trades post 2008: WSJ

Wednesday, 8 Jan 2014 | 6:09 AM ETReuters

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Federal regulators are probing whether several big banks deliberately mispriced mortgage bonds in the years following the financial crisis, The Wall Street Journal reported, citing people close to the inquiry.

The new investigation is a potential blow to the banks as they have already paid billions of dollars in penalties and fines to various federal agencies following scrutiny of their conduct leading up to and during the market panic of 2008.

Banks continued to hold billions of dollars in hard-to-price assets on their books even in the aftermath of the credit crisis.

The investigation, which began less than a year ago, is still at an early stage and may not lead to enforcement action. Subpoenas have been sent to several firms to gather information, according to the newspaper.